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Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analyzing the Flypaper Effects

Author

Listed:
  • Amandeep Kaur
  • Ranjan Kumar Mohanty
  • Lekha S. Chakraborty
  • Divy Rangan

Abstract

Using panel data models, we analyze the flypaper effects--whether intergovernmental fiscal transfers or states' own income determine expenditure commitments--on ecological fiscal spending in India. The econometric results show that the unconditional fiscal transfers, rather than the states' own income, determine ecological expenditure in the forestry sector at subnational levels in India. The results hold when the models are controlled for ecological outcomes and demographic variables.

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  • Amandeep Kaur & Ranjan Kumar Mohanty & Lekha S. Chakraborty & Divy Rangan, 2021. "Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analyzing the Flypaper Effects," Economics Working Paper Archive wp_990, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_990
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    References listed on IDEAS

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    4. Sebastian Langer & Artem Korzhenevych, 2019. "Equalization Transfers and the Pattern of Municipal Spending: An Investigation of the Flypaper Effect in Germany," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 737-765, November.
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    Cited by:

    1. Chakraborty, Lekha, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," Working Papers 21/334, National Institute of Public Finance and Policy.
    2. Pandey, Rita & Gupta, Manish & Sachdeva, Paavani & Singh, Abhishek, 2021. "Financing Biodiversity and Ecosystems Conservation in India: Implications for Efforts and Outcomes," Working Papers 21/335, National Institute of Public Finance and Policy.
    3. Chakraborty, Lekha, 2021. "Mainstreaming Climate Change Commitments through Finance Commission's Recommendations," Working Papers 21/341, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Intergovernmental Transfers; Flypaper Effect; Public Expenditures; Forestry Sector;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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